Why with so many “experts” we cannot get Jamaican move to prosperity

I am also amazed at the number of “experts” residing in Jamaica, whose job it seems is to tell why various proposal cannot work. For the most part these “experts” lack creativity and have never come up with any useful idea on their own, but as soon as one is presented they are always ready to give “expert” advise.

Let’s look  at the $1.5m tax proposal, I hear most of the experts say it cannot work because it creates inequity.

So let me ask this question.

If I earn $692,000 per annum today and I work over time and that takes me to $692,500, would I take home more of less than if I had not worked any overtime.

So at $692,000 I pay no tax

At $692,500, I would need to subtract the 692,500 , leaving $500 and I will now be taxed at 25% or $125, meaning I would now take home $692,375.

With the moved to exempt income below $1.5m, the feeling is that once you work extra hours and your income goes above this figure , the threshold will now be $692,000 and you now pay taxes on $808k.

The funny thing is I never heard the government say this would have been the case, all I have heard is the so called “experts” saying this would be the case and so people would not want to work overtime or go for promotion that pushes then into a new income tax bracket as they would take home less pay.

The solution in my mind is very simple.

Come April 1 if your taxable income is $1,5m or less you pay no taxes

If you work o/t the difference above that is taxed at the usual 25%, which is what exist today.

If you Salary on April 1, 2016 was the $1.5m and you get an increase which moves you above the mark your threshold hold would remain at the $1.5m and you pay taxes on the figure above that figure.

Person currently earning $1.51 – $1.8m would see no change in their current income ie they face no losses, so they cannot be said to be suffering negatively from the new policy.

Inequity will always be present and trying to get rid of that is really an effort in futility. What we really need to be focused on, is how to generate growth in the country, so the GoJ can increase the threshold every further and on day move to reduce income taxes fro 25% to say 15%.

Executive Managers who sit in offices and meet all day gets 4 x salary of regular managers plus profit sharing

Managers get 2 – 3 times salaries of Supervisors

Supervisors get 3 – 4 times salaries of line employees

Those doing the back breaking work for the company to generate profits gets the lowest salaries and the least benefits, yet they are the company;s greatest assets.

Can some expert therefore explain, why the most valuable employees of an organization gets the lowest income and benefits and if that is really not the greatest inequity that exist in the working environment and why are we comfortable with it.

We have a problem with one worker earning  a little more than another but have no issues with a Senior Executive earning 20 – 30 x that of the same worker in whose interest we are now concerned about.

 

What am I missing?

 

 

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2 Responses

  1. Warren, I am always interested in your readings. Whether I agree or disagree with you, I usually do not reply, but this one begs a reply. See my reply below:

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